Day: September 9, 2018

Decred (DCR) provides an intriguing governance & network decision-making alternative to the clunky, informal systems used by traditional PoW powerhouses Bitcoin and Ethereum. The network’s hashrate and transaction volumes have improved over the last six months, and despite bearish price movements DCR has not fallen as far from its all-time highs as the majority of other alt-coins

Cryptocurrencies and blockchains need to work together to bolster the overall ecosystem. Bridging the gap between different ecosystems has been challenging over the years. Three key solutions stand out in this regard, even though they all achieve this goal through different means. BTCRelay, Rootstock, and the Dogecoin-Ethereum Bridge (Dogethereum) are projects worth keeping an eye on.

Dogecoin-Ethereum Bridge

As the name suggests, the goal of this project is to enable the exchange for Dogecoin and ERC20 tokens in a decentralized manner. Although this functionality can be found on some trading platforms already, removing the intermediary from the equation will always be the most favorable approach. All of this needs to achieved without affecting Dogecoin’s circulating supply and embrace decentralization to its full potential.

The Dogecoin-Ethereum Bridge – or Dogethereum – achieves this goal through an off-chain Scrypt hash verification protocol known as Truebit. Combined with some other features such as Truffle for smart contract compilation and deployment and Web3j to interact with the Ethereum blockchain, this particular project seems to be off to a very good start. It is not fully operational yet, but it shows there is still plenty of potential to unlock where cryptocurrencies are concerned.

BTCRelay

Unlike the previous example, BTCRelay bridges the gap between Bitcoin and Ethereum. It will serve as a building block to ensure Ethereum’s smart contracts can be verified securely using Bitcoin transactions. Additionally, this project allows users to access Ethereum dApps by paying for access through Bitcoin.

Under the hood, BTCRelay is an Ethereum contract which can store Bitcoin block headers. With these headers, the project can build its own minimal version of the Bitcoin blockchain, rather than storing all of that data as a full node. As everyone can become a Relayer supporting this solution without heavy hardware of mining involved, the project can introduce a lot of positive changes for both cryptocurrency ecosystems alike.

Rootstock (RSK Bridge)

Bitcoin enthusiasts have been excited about Rootstock ever since the project was first announced a while ago. The purpose of this protocol is simple” bridging the gap between Bitcoin and Ethereum. However, there is also a two-way peg solution, which makes it easier to interact with supported networks through the native RSK token. There are some prerequisites prior to using this system to its full extent.

More specifically, users need to whitelist their Bitcoin wallet address and call the Bridge contract to get the Federation’s address. Once funds are sent to the Bridge – only to be done after being officially whitelist – users can obtain the funds in RSK. It is a bit of a multi-step approach to achieving a goal very similar to BTCRelay, although both options seemingly have their merit in this regard.

The post BTCRelay vs Rootstock vs Dogethereum appeared first on NullTX.

In prepared testimony given before the U.S. House of Representatives Financial Services Committee, Yaya Fanusie, director of analysis for the Foundation for Defense of Democracies, explained how though terrorists have tried to raise funds through cryptocurrencies, instances are rare to non-existent. Instead, groups seeking to cause mayhem much prefer good, old cash.

Also read: Bitcoin ATMs Targeted by Malware for Sale in Underground Markets

Terrorists Prefer Cash to Cryptocurrency to Fund Efforts

“The good news is that most terrorists, particularly those operating on jihadist battlefields, inhabit environments that are not currently conducive to cryptocurrency use,” Mr. Fanusie clarified for an anxious U.S. Congress Subcommittee on Terrorism and Illicit Finance this week. “They usually need to purchase goods with cash (which is the most anonymous funding method), often in areas with unreliable technology infrastructure. In addition, cryptocurrencies are based on distributed ledger (blockchain) technology, where users’ pseudonymous transactions are recorded for public viewing. This leaves a trail that unsophisticated users may find difficult to obfuscate. However, as digital currency usage grows, such barriers may fall away.”

It turns out, Mr. Fanusie is something of a trope killer for crypto. This isn’t the first time he’s disabused Congress of its assumption decentralized digital money is a force for evil. He worked for the better part of a decade at the CIA as a counterterrorism analyst. He routinely had the ears of the US military, White House policy wonks, and law enforcement. He even personally briefed then-President George W. Bush on the spectre of threats as far back as 2008.

“Cold hard cash is still king,” Mr. Fanusie continued, “but jihadist groups are building diverse portfolios. Illicit actors adopt new technologies earlier than the broader public. When paper checks, credit cards, and Paypal each emerged, criminals exploited them early on. There are enough case studies of jihadist groups experimenting with cryptocurrencies to suggest that law enforcement and the intelligence community must prepare for terrorists to try to exploit digital tokens as the technology spreads.”

Connection Still a Little Fuzzy; Job Security

The crypto currency committee has been fighting connections to terrorism put forward by governments since the day politicians discovered Bitcoin existed. As these very pages summarized, “The first conflation of digital currencies and terrorism actually stems from a 2008 paper in the Richmond Journal of Law and Technology in which the author stated that ‘[terrorists] seeking to avoid detection have turned to other methods of transferring money, such as commodities trades, hawala, and digital currencies.’ In defining this latter phrase, the report referenced a paper entitled ‘The Cyber-Front in the War on Terrorism: Curbing Terrorist Use of the Internet.’ It was published in 2005. That’s right, terrorists allegedly using digital currencies is older than bitcoin itself.”

And the test for enthusiasts has always been: if in fact bitcoin core or some other crypto was used during a terrorist act, such news would be sounded to the heavens. That neither has seemingly happened is telling. For experts such as Mr. Fanusie, merely dismissing the threat won’t get him invited back to hearings. So, anyone wishing to maintain intellectual integrity, yet hope to keep their job, seem to have to thread a testimonial needle. Sure, an expert might have to admit terrorists are not using it, but they could!   

“Cryptocurrencies may become the way we transact in the future,” Mr. Fanusie concludes. “But they are also becoming part of the illicit financing toolkit available to terrorists. FDD’s Center on Sanctions and Illicit Finance (CSIF) has now documented cryptocurrency fundraising campaigns run by social media entities associated with the Islamic State and al-Qaeda. Although public evidence indicates that terrorist groups have had only limited success so far with cryptocurrency fundraising efforts, the rising profile of digital currency has been accompanied by jihadist networks experimenting with them more frequently. By preparing now for terrorists’ increasing usage of cryptocurrencies, the U.S. can limit the ability to turn digital currency markets into a sanctuary for illicit finance,” thus preserving his and his policy group’s return invitations to Congress for years to come.

Is use by terrorists a real problem for cryptocurrency adoption going forward? Let us know in the comments section below.

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The post Terrorists Prefer Cash to Crypto, According to Congressional Testimony appeared first on Bitcoin News.

The number of active addresses, which can be an indication of the number of active users, is shockingly low for almost all cryptocurrencies.

There are 52 cryptocurrencies with market caps in excess of USD 100 million, which should suggest a tremendous user base for each of those cryptos. Yet, only 20 cryptocurrencies have had over 1,000 active addresses in the past 24 hours as of 9 September 2018. This would suggest that market cap is not a good measure of a crypto’s true strength or use, and this article explores this further.

Onchainfx.com is a site that is similar to CoinMarketCap.com, except they have even more stats than CoinMarketCap.com. One of these stats is active addresses for the last 24 hours. This doesn’t directly translate to active users since crypto users often use multiple addresses for anonymity purposes. Therefore, the number of active users can be far lower than the number of active addresses, but there is no way to know by how much. All stats in this article are from Onchainfx, and it must be noted that Onchainfx only lists 107 cryptocurrencies, while CoinMarketCap lists well over 1,000.

Bitcoin is actually quite healthy with 667,000 active addresses in the past 24 hours. Likewise, Ethereum has 293,000 active addresses. So for the top 2 cryptos, the rankings according to market cap are the same as the rankings according to active addresses. However, beyond this, there is a tremendous divergence.

Litecoin comes in at #3 with 88,000 active addresses, even though it is only #7 when ranked with market cap. EOS has 70,000 active addresses, and then very surprisingly Dogecoin has 64,000 active addresses, making it #5, even though it is #20 when ranked with market cap. Dogecoin has always had an extremely active user base centered around its Reddit subforum, r/dogecoin, and perhaps it could be considered the true #5 crypto.

Dash, the top X11 crypto, has 40,000 active addresses. The privacy coins Zcash and Monero have 30,000 and 18,000 active addresses respectively. Bitcoin Cash, Verge, Digibyte, Decred, and Ethereum classic are the rest of the cryptos with active addresses above 10,000.

There are only 7 cryptos with active addresses between 10,000 and 1,000, putting the number of cryptocurrencies with active addresses over 1000 at only 20. This is despite 52 cryptos having market caps in excess of USD 100 million, and 105 cryptos having market caps in excess of USD 10 million. There is clearly a huge disparity between many cryptos’ actual use and their value. It seems prices for many cryptos are far above what they really should be, most likely due to speculation. This suggests that in the long-term, many crypto market caps will be collapsing towards zero.

A couple of cryptos, MaidSafeCoin and KuCoin Shares, really stand out since they have market caps in excess of USD 100 million yet 24 and 13 active addresses respectively. Basically, no one is using these cryptos yet they have USD 100 million in their market cap. Obviously, these market caps are prone to a quick collapse. There are many cryptos with a market cap of over USD 10 million yet less than 100 active addresses.

Another shocking stat is Stellar, which has a market cap of USD 3.7 billion, yet only 500 active users. This is really nonsensical and might be an indication that Stellar’s recent rally is all from manipulation. However, this requires further investigation.

All hope is not lost for crypto, however, quite the opposite. This is just confirmation of what most crypto experts already know, that Bitcoin is the #1 cryptocurrency. Bitcoin has the most liquidity, infrastructure, demand, and the biggest user base, and it would seem crypto users are choosing to use Bitcoin when transacting instead of altcoins. Ethereum is strong too since it is the #1 cryptocurrency platform for developing dApps.

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In the US, a senior member of the Foundation for Defence of Democracies Centre on Sanctions and Illicit Finance has spoken out against anti-crypto rhetoric, particularly those aimed at the financing of Jihads.

A senior member of the center, Yaya Fanusie maintains that despite continual references by governments around the world that cryptocurrency finances terrorist activity, terrorist networks have been mainly unsuccessful in using cryptocurrency to fund their activities.

He recently suggested in a congressional testimony, that cash is still king in the underworld; particularly in the zones that Jihadists operate in, mainly being locations where high tech hasn’t reached or is unavailable. He maintains that, though the nature of Bitcoin may seem suited to illegal activity amongst the groups such as Al Qaeda, ISIS, and Boko Haram, they continue to use cash to fund their jihads.

Forbes writer Ted Knutson reveals that the Center for a New American Security (CNAS) declared that the use of Bitcoin in terrorist activities between 2015 and 2017 amounted to only about eight bitcoins. The CNAS report released last year revealed that it was purely an anecdotal evidence which continues to back up politicians’ fears of terrorist financing through Bitcoin and other cryptocurrencies. It suggested that attempting to convert fiat to bitcoin may create logistical and security problems of their own for would-be Jihadists.

New legislation and regulation around tightening KYC and AML laws have made the terrorists job even harder with less opportunity to get their bitcoins to where they want them. More sophisticated tracking by exchanges and law enforcement makes any illegal activity even more challenging.

Drug Enforcement Agency (DEA) agent Lilita Infante says that 10% of Bitcoin transactions are associated with illegal activity. This is down from 90% of Bitcoin transactions being used for crime in 2013.

Legitimate Bitcoin trading, investing, and use for goods and services has increased dramatically and is outpacing the use of Bitcoin for illegal activity, even though overall, there is much more money being transacted with Bitcoin for illegal activities now than in 2013.

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Bitcoin, alts see sharp rebound today – though recent losses have left their mark on crypto’s total market cap, still below $200 billion

Law enforcement authorities in New Delhi will file charges on Monday in the Coinsecure hack case. Coinsecure was a large cryptocurrency exchange allegedly wallet-hacked back in April of this year. It turns out to be an international crime, one spread over half a dozen exchanges.

Also read: Bitcoin ATMs Targeted by Malware for Sale in Underground Markets

India Cops Will File Charges Monday in Coinsecure Hack Case

“We contacted some of the exchange firms from where the bitcoins were routed,” officer Anyesh Roy explained. “Initially, they didn’t give a response, but now we are in the process of getting the information through mutual legal assistance treaty.”

Nearly half a year ago, a large crypto exchange in India, Coinsecure, announced its offline wallet had been emptied, apparently hacked. Over 400 bitcoin were stolen, then carrying a value of some Rs 20 crore, which is $2,773,800 in USD at today’s prices. “It was later found that the private keys — password kept by the company and stored offline — were leaked online leading to the hack,” the Times claims.

The seemingly international character of the crime led India authorities to seek cooperation with Interpol in an effort to track down the stolen bitcoin. It did appear coins were located in other exchanges, as Mr. Roy noted.

An Inside Job?

“Mutual legal assistance treaties are agreements between two or more countries for sharing of information. It is primarily used to request and obtain evidence for criminal investigations and prosecutions,” the Times of India detailed. Five, as yet unnamed, crypto exchanges were found to be holding stolen bitcoin.

These pages reported back at the time how the exchange’s CEO openly accused its security officer of the crime. “‘On April 9th,’ Mr. Kaira continued, ‘we were informed by our CSO […] that 438.318 were stolen from our company’s bitcoin wallet due to some attack. As the private keys were kept with Dr. Amitabh Saxena, we feel that he is making a false story to divert our attention and he might have a role to play in this entire incident.’” Dr. Saxena was later arrested. It is unclear if he will be named in Monday’s formal charges.

In between arrests and Monday’s charges, Coinsecure began processing victim refunds summer of this year. As we explained, “We are happy to inform you that we have started the process of compensating our customers in Indian rupees, ex gratia, for the loss of their bitcoins in the attack that occurred on April 9, 2018. Please note that the last date for submitting claims to us along with all appropriate documents is June 30, 2018 — We will not entertain any claims received after June 30, 2018, and we shall have no liability towards any users who try to submit claims after the said date.” The Times suggests some $2M has been returned.

What do you think about India’s authorities pressing charges against suspects stemming from the $2.7 million Coinsecure hack? Let us know what you think about this subject in the comment section below. 

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Lightning Labs developer Alex Bosworth was investigating atomic swaps, a way to transfer cryptocurrencies between different blockchains without middlemen, and then came up with the groundbreaking idea of submarine swaps.

The Lightning Network was originally developed to be a scalability solution for Bitcoin. This would require an on-chain Bitcoin transaction to lock up coins in a lightning channel, and then another transaction to close the channel and disburse the Bitcoin to its proper owners. In-between the opening and closing transactions there can be thousands or millions of transactions on the Lightning Network. Lightning Network is still a work in progress but definitely has the potential to allow Bitcoin to scale to the size of financial networks like Visa.

Submarine swaps, on the other hand, have the ability to allow any cryptocurrency to be used on the Lightning Network, which could lead to the formation of the ultimate decentralized exchange. This could, in turn, lead to the Lightning Network becoming a scalability solution for all cryptocurrencies, and not just Bitcoin alone.

What Alex Bosworth figured out is that with Submarine Swaps a user can send Bitcoin from the Bitcoin blockchain into an already active Lightning Network channel. One major advantage of this right off the bat is that it allows Lightning channels to be refilled, instead of going through the tedious procedure of opening a new channel when bitcoins in a channel run out, saving on transaction fees.

Even more importantly, any cryptocurrency can be sent as a payment into the Lightning Network by using Submarine Swaps. Jason Wong has already created the software to send Litecoin and Ethereum into the Lightning Network and has successfully tested it.

It is clear that any cryptocurrency can be used on the Lightning Network if the proper software is developed for each crypto. This means that instead of a Lightning Network for each type of crypto, there can just be one Lightning Network with all the cryptos.

Simultaneously, this can easily be developed into an ultimate decentralized exchange where every cryptocurrency can be traded with one another, without regulations or middlemen. It changes the entire paradigm of crypto exchanging, which is an aspect of the industry that is currently being suffocated by government regulations. A decentralized exchange built with submarine swaps would make government regulations obsolete and ineffective, freeing the entire crypto world from centralized tyranny. Long term, this would increase the proliferation and profitability of crypto.

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A highly touted investment instrument that sought to appeal to U.S. investors looking for cryptocurrency exposure has just seen a setback.

Cryptocurrency enthusiasts are all hoping to see their holdings achieve new all-time highs later this year. Although it is not impossible to reach an new highs, it seems rather unlikely anything will change in the coming weeks. The following currencies – ranked by days from last ATH – set their all-time highs a lot more recently than traders remember.

#6 Loom Network

The Loom Network aims to use Ethereum’s technology to become a platform-as-a-service. It is designed to offer large-scale decentralized application support, and it seems the interest in this project reached a peak on May 7th of 2018. Despite that period being in the middle of this year’s bear trend, Loom Network set its all-time high just 124 days ago.

#5 Bytecoin

Although the cryptocurrency community has some mixed feelings toward Bytecoin, the project is still firing on all cylinders. Its most recent all-time high was recorded 123 days ago, though it remains to be seen if that was the last time BCN ever saw such a high value. Even so, it shows the bearish pressure of 2018 has not crushed the hopes and dreams of all cryptocurrencies.

#4 Zilliqa

Ever since Zilliqa came to market, it has become quite popular among projects exploring new scalability options. Despite a vast number of companies tapping Ethereum to build their dApps, it is evident Zilliqa may offer more scalability tools at this point in time. The ZIL all-time high was recorded 122 days ago, further confirming positive things tend to happen for cryptocurrencies which offer something worthwhile.

#3 Bluzelle

It has been relatively quiet where Bluzelle is concerned these past few months. This is despite the altcoin noting a new all-time high 118 days ago, yet it seems things have calmed down quite a bit ever since. In fact, it seems the current has dropped 87.5% from its all-time high over those past 121 days, which is not an encouraging sign at this time.

#2 Theta Token

We recently discussed Theta Token on NullTX, and it seems the currency remains in relatively high demand. Its latest all-time high was recorded 97 days ago, although things look very different as of right now. It will be interesting to see how things evolve in this regard, as recovering the 70.25% deficit from its ATH will be quite challenging.

#1 VeChain

Perhaps the biggest surprise of them all is how the VeChain price recorded a new all-time high just four days ago. Given the current market conditions, that seems almost impossible, yet the statistics all back it up. Sadly, VeChain is incapable of bucking the current bearish market trend, as it has lost a significant amount compared to that ATH in a rather quick succession.

The post Top 6 Cryptocurrencies That Recently Hit ATHs appeared first on NullTX.

Companies from Russia and other parts of the former Soviet Union have apparently turned the small country of Estonia into a massive money laundering haven. An investigation into the Estonian branch of Denmark’s largest bank is examining up to $150 billion which may have been involved.

Also Read: The Daily: Robinhood Aiming for IPO, Dodgers to Give Away Crypto Tokens

From $3.9 Billion to $150 Billion

Investigators at Danske Bank (CPH: DANSKE), the largest bank in Denmark, are reportedly combing through a whopping $150 billion worth of transactions that passed through its Estonian branch between 2007 and 2015. While its likely not all of the suspicious funds are from an illegal source, this is a jump by an order of magnitude from the bank’s initially suspected figure said to be involved with money laundering by Russian and other Eastern European companies.

Last year Danish media sources reported the suspected laundered funds at $3.9 billion but in early July the figure jumped to between $8 and $9 billion. And earlier this month, FT reported that up to $30 billion may be suspect. The bank’s stock price has taken a considerable hit from the revelations.

“Any conclusions should be drawn on the basis of verified facts and not fragmented pieces of information taken out of context,” Danske Bank chairman Ole Andersen told the Wall Street Journal which brought up the $150 billion figure. “As we have previously communicated, it is clear that the issues related to the portfolio were bigger than we had previously anticipated.”

Weak Deterrence?

According to Estonian law, an individual may face up to ten years in jail for taking part in an organized money laundering crime. However, a company guilty of money laundering faces a maximum penalty of just 16 million euros.

Back in July, the bank’s Board announced it intends to waive all income from suspicious transactions in Estonia and use it “to the benefit of society,” like supporting efforts to combat financial crime. “It is still too early to draw any conclusions regarding the extent of the issues, as the comprehensive investigations into the matter are still ongoing. However, it is clear that we did not live up to our own standards or the expectations of society at large when it came to preventing our Estonian branch from being used for potentially illegal activities at the time when these transactions took place. This is something we deeply regret and which we should not benefit from financially in any way. Therefore we will not keep the income from these suspicious transactions,” CEO Thomas F. Borgen, said at the time.

Why are regulators going after crypto with so much money laundering going on in the banking system? Share your thoughts in the comments section below.

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